The Commission assesses the costs and benefits of combating climate change and recommends a package of measures to limit global warming to 2° Celsius. Some of the measures apply to the EU, such as the binding target to reduce greenhouse gas emissions and measures on energy, and others have a broader international scope, such as negotiating an international agreement.

ACT

Communication from the Commission, of 10 January 2007, entitled: "Limiting Global Climate Change to 2 degrees Celsius - The way ahead for 2020 and beyond" [COM(2007) 2 final - Not published in the Official Journal].

SUMMARY

Strong scientific evidence shows that urgent action to tackle climate change is imperative. New research has confirmed that the climate really is changing and there are signs that these changes have accelerated. Impact analyses are beginning to quantify precisely what the cost of inaction or of simply pursuing current policies will be.

In 2005, the Commission laid the foundations for an EU strategy to combat climate change. This document now sets out more concrete steps to limit the effects of climate change and to reduce the risk of massive and irreversible disruptions to the planet. These short-term and medium-term measures target both developed countries (the EU and other industrialised countries) and developing countries.

The EU and its Member States have confirmed their target to limit the global average temperature increase to 2° Celsius compared with pre-industrial levels, the point beyond which the impact of climatic change is believed to increase dramatically. Research shows that stabilising the level of greenhouse gases at 450 ppmv (parts per million volume of CO2 equivalent) would lead to a 1 in 2 chance of reaching the target of a 2°C rise (compared with a 1 in 6 chance if levels reach 550 ppmv, and a 1 in 16 chance if levels hit 650 ppmv).

Costs and benefits of future policy choices

Recent research, such as the PESETA study carried out for the Joint Research Centre and the Stern Review, points out the hefty economic and social costs of failing to take sufficient action to combat climate change. The Stern Review estimates this cost at between 5 and 20 % of global DGP.

Climate change will cause widespread damage to populations, ecosystems and resources, as well as to infrastructure and living conditions, ranging from an increase in mortality and disease linked to changes in temperature, damage caused by more frequent flooding and a rise in sea level, increasing desertification in Southern countries and scarcer fresh water resources. The PESETA study focuses in particular on the impacts in Europe on agriculture, public health, tourism, river basins and coastal systems.

According to the impact assessment carried out by the Commission, the investment needed to maintain the level of greenhouse gases at 450 ppmv would cost about 0.5 % of global GDP over the period 2013-2030. Global GDP growth would only fall by 0.19 % per year up to 2030, a fraction of the expected annual GDP growth rate (2.8 %). The Commission also stresses that the global cost needed is overstated, since it does not account for the benefits of combating climate change.

Effectively tackling climate change would in fact produce significant benefits, including fewer damages by avoiding problems. In the same way, reducing our consumption of fossil fuels (especially oil and gas) will help cut costs in importing these resources and substantially improve the security of energy supply. Similarly, reducing CO2 emissions will help improve air quality, which will produce huge health benefits. What's more, most studies show that mitigation policies would have positive effects on employment, for example in the field of renewable energy and cutting-edge technology.

The benefits of combating climate change will not stop at EU borders. Similar benefits can be expected in other countries if they adopt similar measures to Europe, especially regarding the security of energy supply and air quality.

Action in the EU

The EU has already proved, through internal policies, that is possible to reduce greenhouse gas emissions without undermining economic growth. The Commission stresses that there is the potential to further reduce emissions considerably and echoes its commitment to pursue and extend current measures and to adopt new measures.

The Commission suggests that the EU should adopt targets to reduce greenhouse gas emissions. It calls for the EU to set the target in international negotiations of reducing greenhouse gas emissions in developed countries by 30 % (compared to 1990 levels) by 2020. Until an international agreement is made, and without prejudice to the position it will take in these negotiations, the EU should immediately make the resolute and independent commitment to reduce its own emissions by at least 20 % by 2020. At the March 2007 European Council, Member States also strongly backed these targets.

In line with the strategic analysis of the EU's energy policy, the Commission recommends taking the following measures on energy:

increasing the duration of quota allocations to over five years, as it is now;

extending the scheme to other gases and sectors;

aligning allocation procedures across Member States and

linking the EU ETS to compatible mandatory schemes in other States (such as California and Australia).

In order to limit emissions in the transport sector, the Commission asks the Council and Parliament to adopt, where necessary, proposals to include aviation in the EU ETS and to link taxes on tourism vehicles to their CO2 emissions. There are also plans to reduce CO2 emissions from cars to reach the target of 120 grams of CO2 per kilometre (g CO2/km). The Commission also stresses the need for consumers to do more, to cut the emissions produced by freight transport by road and maritime transport and to address biofuels.

The document suggests cutting CO2 emissions in other sectors, such as by improving the energy efficiency of residential and commercial buildings. It also recommends reducing other gases, notably by adopting and strengthening measures on agriculture and forestry, setting limits for methane emissions from industry and gas engines and including these sources of emissions in the EU ETS, stricter measures on fluorinated greenhouse gases and tackling nitrous oxide from combustion and large installations.

It is also important to rapidly mobilise funds for research on the environment, energy and transport under the Seventh Framework Programme and to increase the research budget after 2013 to promote the development of clean technology and increase our knowledge of climate change. The action plans on energy technology and environmental technology must be fully implemented.

The document also notes that the strategic guidelines on cohesion should be applied, which promote sustainable transport and energy and environmental technologies.

International Action

The battle against climate change can only be won through global action. International negotiations must move beyond rhetoric towards negotiations on concrete commitments.

The Commission believes that developed countries must commit to cutting their greenhouse gas emissions by 30 % compared to 1990 levels by 2020, as part of a post-2012 international agreement. Developed countries also have the technological and financial capacity to reduce their emissions, which is why they should make most of the effort over the next decade. Emissions trading schemes will be a key tool to ensure that developed countries can reach their targets cost-effectively.

The growth in developing countries' economies and emissions makes it essential for them to start reducing the rise in their emissions as soon as possible and to cut their emissions in absolute terms after 2020, since by 2020, these countries will be responsible for over half the greenhouse gas emissions.

Many developing countries are already making efforts that result in significant reductions in the growth of their greenhouse gas emissions, through policies addressing economic, security or local environmental concerns. Developing countries have many strategic options where the benefits outweigh the costs, such as improving energy efficiency, promoting renewable energy, adopting measures on air quality and recovery of methane from sources such as waste.

The following elements should be part of the process to step up action in these countries:

streamlining and expanding the clean development mechanism under the Kyoto Protocol to cover entire national sectors;

improving access to finance via a combination of the various mechanisms available so that developing countries can build the facilities to generate the cleanest energy possible;

countries that reach a level of development similar to that of developed countries should make a quantified, appropriate commitment;

no commitments for least developed countries.

Lastly, a future international agreement should address issues such as further cooperation in research and technology development, halting deforestation and restoring forested areas, adapting to the inescapable impacts of climate change and concluding an international agreement on energy efficiency standards.

According to scientific research, the currents levels of CO2 and methane in the atmosphere are the highest they have been for 650 000 years, which causes a significant acceleration of the greenhouse effect. To stabilise global warming at an average of 2° Celsius, global emissions must fall by almost 50 % compared to 1990 levels by 2050, which implies a 60 to 80 % reduction by most developed countries by 2050 and a gradual but significant effort made by developing countries.

RELATED ACTS

Communication from the Commission of 9 March 2010 - International climate policy post-Copenhagen: Acting now to reinvigorate global action on climate change [COM(2010) 86 final – Not published in the Official Journal].

Communication from the Commission, dated 10 January 2007, on an Energy Policy for Europe [COM(2007) 1 final - Not published in the Official Journal].
This communication is the centrepiece of the package of measures that the Commission submitted in January 2007 (the energy package). After assessing the energy challenges that Europe faces, especially climate change and the security of supply, the Commission sets out a number of steps to take in areas such as the internal energy market, security of supply, energy efficiency, renewable energy resources, energy technology and international energy policy.